Skin in the Game

Taleb is right about more than he has any right to be, buried in more contempt than the argument needs.

Skin in the Game, Nassim Nicholas Taleb, 2018.

Taleb is right about more than he has any right to be, buried in more contempt than the argument needs. Disagreement with him has a way of getting relabeled as evidence you lack skin in the game, which is a hard claim to falsify and he leans on it often.

Taleb argues that judgment without exposure to consequences is not knowledge but a kind of theater, and that any system, a profession, an ethic, a political claim, earns trust only in proportion to what its author stands to lose if it is wrong. He extends this into the minority rule, the observation that a small, stubborn, intolerant group can set the behavior of an entire market or society because it will not negotiate while the majority will. Where the book overreaches is treating skin in the game as a near universal solvent, capable of explaining everything from religion to grammar to why he distrusts having an assistant, with little interest in cases where someone bore real risk and was simply wrong anyway.

Two things kept. The minority rule: a system does not need most people to hold a position, it needs a small enough group that refuses to budge and a structure that makes accommodating it cheaper than resisting it. And the plainer test underneath all of it, whether the person giving advice pays any price if the advice is wrong, which filters a surprising amount of what passes for expertise.

Before I take advice on anything that costs real money, I now ask one question out loud: what does this person lose if I follow this and it goes badly. I keep a short log of the answer. Of the last sixteen pieces of advice logged, four came from people with a real, named cost attached, a contractor eating the redo, a colleague betting the same recommendation on his own project, and I followed all four with no regrets so far. Of the other twelve, I still took nine anyway, mostly because the advice was free and declining it felt awkward in the room, which is precisely the soft failure Taleb has no patience for, and I apparently do.